Becoming a trader is like stepping into a completely new world, with a new language, set of core concepts and fundamental principles, particularly if you want to set up an instant funding account with a prop firm.
It is easy to get overwhelmed at first and it does not reflect badly on you if that is the case; if you feel like there is a lot you do not understand when you first enter the world of finance, you know that there is a lot to learn and it is best to introduce yourself to it slowly.
By contrast, if you go in without doing some research and believe you know everything you need to, this belief will be seriously tested. It is not unheard of for people to lose their evaluation account within a few minutes due to reckless trading activity.
Having a willingness to learn, taking your time and understanding that successful traders will sometimes have losing trades or bad days will all help you become successful, and experience ultimately becomes the best teacher.
However, learning from experience requires some foundational knowledge, and with that in mind, here are some common but effective ways to learn trading skills.
Try Paper Trading
The best place to start is to practice your skills using a demonstration or paper trading account on a platform which suitably replicates the types of systems you would want to use in your trading career.
Many brokerages and prop firms have the option to use a demo account to practice, and that is often a good second step to practice the specific evaluation requirements to get a live account.
Many people learn best by doing, and paper trading can be a good start to dip your toes into trading, understand how it works and avoid the huge consequences that come from major market losses.
Some paper trading platforms even have rudimentary tutorials and guides that help you learn the basics in a way that you often cannot whilst trading live, in the same way, you cannot learn to swing a racquet during the qualifying stages of Wimbledon.
Whilst a trading journal is mostly associated with live trading, it can also be helpful at first to understand why you might have made certain trades.
Learn Essential Terminology
Generally, if you are uncertain about the definition of any term on an investment platform or website, you should not put any money into it.
There are some excellent websites such as Investopedia that will describe investment and trading terms in more understandable language that can help teach you the basics.
Once you have a groundwork of knowledge, your paper trading practice will become more useful, you will know the best questions to ask and you will evolve even quicker as a trade.
Treat yourself as much as a student as a trader when you are starting out and take every moment on the market as a learning experience.
There are some excellent books that cover the basics of trading as well that can be extremely helpful. Ultimately people learn in different ways and you should find the system that works for you.
Seek Out Mentors
Much like you should treat your early trading career as a learning experience, you should also spend time seeking out effective and generous teachers who can give you the benefit of experience.
Do not ask for tips on specific stocks to trade, but instead, look for a community of traders and ask them a few questions about trading strategy that you cannot find the answers to through basic research.
Ironically, finding the right mentor means developing a foundational set of skills. This will show that you have the potential to develop further.
Some will offer that guidance for free, some will work with other people in their trading group or prop firm out of solidarity, and some will want to be paid. In any case, it is important to find a mentor that will provide useful, relevant information.
Build Up Research Skills
Whilst the overall markets can be very complex and feature a lot of interconnectivity, it is possible to build that knowledge base slowly, and the best way to do so is to focus your attention very narrowly at first.
When you are paper trading or trying out small-scale trades, pick a small number of companies (no more than five) and look up their trading history and company news. For Forex, take a look at currency pair history and look at which pieces of economic news affect one currency but not the other.
This is a useful exercise in building your analytical skills, as you will be able to see which types of events, both internal and external, will affect the price.